Daily News
View All NewsManpowerGroup reports improving European labor markets in Q2, but US revenue dips
ManpowerGroup Inc. (NYSE: MAN) reported improving market conditions across several geographies during the second quarter with France, Italy, Mexico and Poland leading the way. However, US revenue fell 7.4%.
Total second-quarter revenue at the company, one of the world’s largest staffing providers, rose 5.6% in constant currency. ManpowerGroup announced results were affected by a stronger US dollar during the second quarter, and the company reported restructuring charges — including $6.3 million in its Americas segment.
| (US$ millions) | Q2 2017 | Q2 2016 | % growth | % constant currency |
| Revenue | $5,174.8 | $5,022.1 | 3.0% | 5.6% |
| Gross profit | $861.7 | $860.7 | 0.1% | 2.5% |
| Gross margin | 16.7% | 17.1% | ||
| Net earnings | $117.0 | $115.4 | 1.4% | 3.4% |
French revenue rose 11.0% in constant currency; the country is ManpowerGroup’s largest single market. Meanwhile, Italian revenue increased 25.2% in constant currency, and Mexican revenue jumped 14%.
Northern European revenue rose in constant currency, although UK revenue fell 10%.
Revenue by geography
| (US$ millions) | Q2 2017 | Q2 2016 | % growth | % constant currency |
| Americas | ||||
| United States | $671.3 | $725.3 | -7.4% | -7.4% |
| Other Americas | $385.6 | $355.7 | 8.3% | 10.6% |
| Total Americas | $1,056.9 | $1,081.0 | -2.2% | -1.5% |
| Southern Europe | ||||
| France | $1,356.3 | $1,252.2 | 8.3% | 11.0% |
| Italy | $366.5 | $299.8 | 22.2% | 25.2% |
| Other Southern Europe | $412.9 | $379.4 | 8.8% | 9.7% |
| Total Southern Europe | $2,135.7 | $1,931.4 | 10.6% | 12.9% |
| Northern Europe | $1,281.7 | $1,322.3 | -3.1% | 2.3% |
| Asia Pacific Middle East | $643.4 | $614.6 | 4.7% | 5.2% |
| Right Management | $57.1 | $72.8 | -21.6% | -19.8% |
Gross margin narrowed to 16.7% from 17.1%.
The company’s Right Management segment, which provides outplacement, reported gross profit fell 22% in constant currency.
ManpowerGroup Solutions, which includes the company’s recruitment process outsourcing offering and its TAPFIN managed service provider offering, reported gross profit rose 6% in constant currency.
Click on chart to enlarge
Quote
“We are pleased with our strong second quarter results,” Chairman and CEO Jonas Prising said. “The labor markets continue to improve in Europe and across the globe, which is a good foundation for continued profitable growth as we head into the second part of 2017. The improving market conditions were spread across the geographies where we operate, and revenue growth was strong in a number of our countries.”
Guidance
ManpowerGroup forecast third-quarter revenue to range from up 5% to 7% on a year-over-year basis. In constant currency, the company expects revenue to increase between 4% and 6%.
Third-quarter revenue guidance by region:
- Americas, down 2% to 4% (down 2% to 4% in constant currency)
- Southern Europe, up 12% to 14% (up 10% to 12% in constant currency)
- Northern Europe, up 2% to 4% (up 1% to 3% in constant currency)
- Asia Pacific Middle East, up 2% to 4% (up 5% to 7% in constant currency)
- Right Management, down 16% to 18% (down 16% to 18% in constant currency)
Share price and market cap
Shares in ManpowerGroup fell 8.14% in early afternoon trading to $109.16; the company had a market cap of $7.31 billion, according to Google.